ElectroCore said yesterday that it’s planning to cut nearly 40% from its workforce and “resource adjustments” as it looks to focus on “currently available and near-term revenue opportunities and on clinical programs specifically designed to expand the GammaCore product labeling.”
The layoffs affect the Basking Ridge, N.J.-based company’s field sales force and clinical operations. ElectroCore said it’s eyeing “high-value geographic and other sales territories where the current prescriber base and regional payer coverage are the most concentrated,” including the pursuit of relationships with pharmacy benefit managers.
The company’s clinical development program will also be scaled back as part of the plan, the company said, including postponing several planned studies. Medical affairs activities will also be reduced, ElectroCore added.
ElectroCore said it expects the plan to be fully implemented by the end of the second quarter and that it hopes to cut its average quarterly cash burn to less than $7 million by the third quarter of 2019, down from $12 million. The moves are expected to cost about $350,000 to implement the plan, with second-quarter cash burn pegged at $11 million to $11.5 million.
“Although we are cognizant of the pain and disappointment that may be experienced by those employees who will be separating from the company as we reduce our workforce from 91 to 55 positions under this program, the board and management believe the adjustments to the expenditure of our resources are necessary as we respond to evolving market forces in the headache field,” CEO Frank Amato said in a press release. “As was shared on our most recent earnings call, there are several promising commercial channels capable of providing significant sales acceleration. In the near term, we intend to sharpen our focus on opportunities in the Veterans Administration and Dept. of Defense and areas of the U.S. where reimbursement by regional payers has already been gained. We will also pursue opportunities to expand our reach through partnerships into new areas of medicine where migraine and cluster headaches have a high prevalence, as well as monetizing the investments we have made in the United Kingdom. As additional payers join the ranks of healthcare organizations currently reimbursing for GammaCore therapy, we intend to deploy additional field force resources and expand our geographic reach but will do so on a measured basis. We remain confident in the significant market opportunity that exists for GammaCore, both in the U.S. and globally, and we will continue to work to make this technology available to the broadest possible patient population. I would like to personally express my appreciation to each of the employees impacted by this decision for their commitment and dedication to the development and commercialization of GammaCore.”
In March, ElectroCore said that its CFO Glenn Vraniak resigned, effective April 1, replaced by Cellectar Biosciences finance chief Brian Posner.
